Help protect WNC lifestyle

Published: Monday, June 29, 2009 at 4:30 a.m.

Last Modified: Sunday, June 28, 2009 at 12:08 a.m.

Whether your family has lived in Western North Carolina for years, or you moved here in pursuit of the high quality of life in this area, most residents agree that the wide vistas, open farmland, clear mountain streams and general country living make WNC a gem.

Diane Silver

That’s why we’re high on the national list of most desirable places to live. Such popularity, however, can lead to a loss of the very qualities that make this area desirable. Many residents agree that maintaining the rural characteristics of Henderson County contributes to everyone’s quality of life. This means keeping farms and woodlands intact, rather than subdividing them for housing or other development. One of the best strategies for this is conservation easements.

For folks unfamiliar with conservation easements, the basic idea is this: As demand for land in this region increases, land becomes more and more valuable. This increases the tax burden of a piece of land and also increases the incentive to sell it off. Conservation agreements preserve property in its natural, undeveloped condition. The landowner voluntarily puts a permanent restriction on the deed, prohibiting certain activities such as development or mining or logging. This restriction reduces the value of the land by making it undevelopable, it takes the property off the high value market.

There are a lot of legal details and conditions, so people interested in this opportunity should contact a land trust, such as Carolina Mountain Land Conservancy (CMLC), for all the details, as well as consult their own financial advisor.

But, there are some significant benefits that are time limited. Usually, you can deduct up to 30 percent of your adjusted gross income on your federal taxes, and you can carry over any unused deduction for five more years. So, for example, an owner who donates a conservation agreement valued at $100,000 and who has an annual adjusted gross income of $60,000 may deduct 30 percent of $60,000 ($18,000) in each of years one through five and the remaining $10,000 in year six. But, if that same owner (with $60,000 income) donates an easement valued at $200,000, he can still only deduct 30 percent of his income ($18,000) each year, and he can only carry it over for five years, so he would be unable to use $92,000 worth of his donation.

To encourage conservation easements in light of these limitations, the 2008 Farm Bill offers a better deal. It allows qualified farmers and ranchers who donate conservation easements in 2008 or 2009 to take a federal tax deduction up to 100 percent of adjusted gross income and to carry that deduction forward as much as 15 years.

So, if you have a sizable property with high value, but you don’t have a fantastically high income, you might not be able to take advantage of the full donation under the regular rules, but if you donate the easement this year, you may be able to realize a much greater tax benefit. The 2008 Farm Bill also raises the deduction for other conservation easement donors (non-farmers or ranchers) from 30 to 50 percent of their income and expands the carryover period to 15 years as well.

For more information, contact Carolina Mountain Land Conservancy at 697 5777.

Diane Silver is coordinator of the Mud Creek Watershed Restoration Project, housed by the Henderson County Cooperative Extension Service. CMLC is a partner of the Mud Creek Project.

<p>Whether your family has lived in Western North Carolina for years, or you moved here in pursuit of the high quality of life in this area, most residents agree that the wide vistas, open farmland, clear mountain streams and general country living make WNC a gem. </p><p>That’s why we’re high on the national list of most desirable places to live. Such popularity, however, can lead to a loss of the very qualities that make this area desirable. Many residents agree that maintaining the rural characteristics of Henderson County contributes to everyone’s quality of life. This means keeping farms and woodlands intact, rather than subdividing them for housing or other development. One of the best strategies for this is conservation easements.</p><p>For folks unfamiliar with conservation easements, the basic idea is this: As demand for land in this region increases, land becomes more and more valuable. This increases the tax burden of a piece of land and also increases the incentive to sell it off. Conservation agreements preserve property in its natural, undeveloped condition. The landowner voluntarily puts a permanent restriction on the deed, prohibiting certain activities such as development or mining or logging. This restriction reduces the value of the land by making it undevelopable, it takes the property off the high value market. </p><p>There are a lot of legal details and conditions, so people interested in this opportunity should contact a land trust, such as Carolina Mountain Land Conservancy (CMLC), for all the details, as well as consult their own financial advisor.</p><p>But, there are some significant benefits that are time limited. Usually, you can deduct up to 30 percent of your adjusted gross income on your federal taxes, and you can carry over any unused deduction for five more years. So, for example, an owner who donates a conservation agreement valued at $100,000 and who has an annual adjusted gross income of $60,000 may deduct 30 percent of $60,000 ($18,000) in each of years one through five and the remaining $10,000 in year six. But, if that same owner (with $60,000 income) donates an easement valued at $200,000, he can still only deduct 30 percent of his income ($18,000) each year, and he can only carry it over for five years, so he would be unable to use $92,000 worth of his donation.</p><p>To encourage conservation easements in light of these limitations, the 2008 Farm Bill offers a better deal. It allows qualified farmers and ranchers who donate conservation easements in 2008 or 2009 to take a federal tax deduction up to 100 percent of adjusted gross income and to carry that deduction forward as much as 15 years.</p><p>So, if you have a sizable property with high value, but you don’t have a fantastically high income, you might not be able to take advantage of the full donation under the regular rules, but if you donate the easement this year, you may be able to realize a much greater tax benefit. The 2008 Farm Bill also raises the deduction for other conservation easement donors (non-farmers or ranchers) from 30 to 50 percent of their income and expands the carryover period to 15 years as well. </p><p>For more information, contact Carolina Mountain Land Conservancy at 697 5777.</p><p>Diane Silver is coordinator of the Mud Creek Watershed Restoration Project, housed by the Henderson County Cooperative Extension Service. CMLC is a partner of the Mud Creek Project.</p>